Land and Environment Court of New South Wales CITATION : Diamond v Birdon Contracting Pty Limited & Anor [2008] NSWLEC 302 APPLICANT: Neville Diamond PARTIES : FIRST RESPONDENT: Birdon Contracting Pty Limited SECOND RESPONDENT: Hawkesbury City Council FILE NUMBER(S) : 40733 of 2008 CORAM: Lloyd J KEY ISSUES: Practice and Procedure :- applicant undischarged bankrupt - outstanding orders for costs against the applicant in favour of the respondents in respect of previous proceedings - general power of the court to dismiss proceedings - abuse of process - proceedings dismissed with costs Bankruptcy Act 1966 (Cth) s 60(2), s 116(2)(g) and s 134(1) LEGISLATION CITED: Civil Procedure Act 2005 s 67 Uniform Civil Procedure Rules 2005 r 13.4 Byrnes v John Fairfax Publications Pty Ltd [2006] NSWSC 251 Davies v Kyogle Shire Council [2007] NSWIRComm 9; (2008) 173 IR 171 Diamond v Birdon Contracting Pty Limited [2007] NSWLEC 92 CASES CITED: Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 Investment Financing Limited v Limehouse Board Mills Limited [2006] 1 WLR 985 Rose v Meriton Apartments Pty Limited [2006], NSWIRComm 298 Sinclair v British Telecommunications PLC [2001] 1 WLR 38 Worchild v University of Queensland Law Society (2006) 234 ALR 179 DATES OF HEARING: 21 October 2008 EX TEMPORE JUDGMENT DATE : 21 October 2008 APPLICANT: T McLoughlin (agent) SOLICITORS: N/A FIRST RESPONDENT: LEGAL REPRESENTATIVES: J J Webster SC SOLICITORS: Russell C Byrnes SECOND RESPONDENT: A D Simpson (solicitor) SOLICITORS: Pikes Lawyers JUDGMENT: - 6 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Lloyd J Tuesday, 21 October 2008 LEC 40733 of 2008 DIAMOND v BIRDON CONTRACTING PTY LIMITED & ANOR [2008] NSWLEC 302 EX TEMPORE JUDGMENT 1 HIS HONOUR: By an application filed on 29 July 2008, Mr Neville Diamond seeks declaratory relief and consequential orders relating to the validity of a development consent for sand mining carried out by the respondent, Birdon Contracting Pty Limited, at Tinda Creek in the local government area of Hawkesbury City Council, and the validity of those operations themselves. 2 The first respondent now applies by notice of motion for an order that Mr Diamond's application be dismissed or stayed on a number of grounds including: (a) that Mr Diamond is an undischarged bankrupt; (b) that there are outstanding orders for costs against Mr Diamond in favour of the respondents in respect of previous proceedings; and (c) the present application by Mr Diamond is an abuse of process. 3 The first respondent also seeks as an alternative an order for security for costs. 4 The evidence before me shows that Mr Diamond is an undischarged bankrupt. He commenced these proceedings after he became a bankrupt. Accordingly, the provisions of s 60(2) of the Bankruptcy Act 1966 (Cth), which allows in certain circumstances an action commenced by a person before he became a bankrupt to be continued, does not apply. Once a person becomes a bankrupt, however, only the trustee may bring or institute any proceedings: s 134(1) of the Bankruptcy Act. A bankrupt may, however, bring an action to recover damages or compensation for personal injury or wrong done to the bankrupt: s 116(2)(g) of the Bankruptcy Act. 5 In the present case, Mr Diamond does not seek to recover damages or compensation for personal injury or wrong done to him. He brings these proceedings under the open standing provision of the Environmental Planning and Assessment Act 1979 (NSW), s 123, which enables any person to bring proceedings for an order to remedy or restrain a breach of the Act, whether or not any right of that person has been infringed by or as a consequence of the breach. 6 Mr Diamond is thus incompetent to bring the principal proceedings: see Worchild v University of Queensland Law Society (2006) 234 ALR 179, per Spender J. It follows that the proceedings are a nullity and must be dismissed: see Davies v Kyogle Shire Council [2007] NSWIRComm 9; 173 IR 171, at [18] per Schmidt J, and Rose v Meriton Apartments Pty Limited [2006], NSWIRComm 298, at [60] per Marks J. 7 On 27 September 2006, Mr Diamond commenced proceedings against the first respondent and Hawkesbury City Council for similar, although not identical, orders as those sought in the present proceedings. Those proceedings are presently stayed following the making of an order for security of costs: see Diamond v Birdon Contracting Pty Limited [2007] NSWLEC 92. 8 On 7 November 2006, an order was made for costs against Mr Diamond in those proceedings which were assessed on 6 February 2008 in the sum of $28,864.65. On 12 March 2008, a judgment relating to those costs was registered in the Local Court in the sum of $29,002.65, representing not only the costs of those proceedings but also unpaid costs of earlier proceedings. The evidence shows that Mr Diamond has failed to pay any monies whatsoever on account of those judgments or orders for costs. 9 There is a suggestion in submissions on behalf of Mr Diamond of a set-off which he claims against the first respondent, but there is no evidence of this set-off having been determined and the judgment against him in respect of the outstanding costs remains. 10 The Court has an inherent jurisdiction to require a person to settle the costs of a previous action before pursuing a new action, and in order to prevent an abuse of process may stay proceedings until a previous costs order has been satisfied: see Sinclair v British Telecommunications PLC [2001] 1 WLR 38 (Court of Appeal), Investment Financing Limited v Limehouse Board Mills Limited [2006] 1 WLR 985 (Court of Appeal) and Byrnes v John Fairfax Publications Pty Ltd [2006] NSWSC 251, per Simpson J. What matters is not the precise nature of the earlier proceedings, but whether their outcome and the failure to pay the costs renders the second set of proceedings abusive: see Investment Financing Limited noted above. In other words, the bringing of fresh proceedings against the same respondent without first settling outstanding orders for costs in favour of these respondent is clearly an abuse of process. 11 Moreover, Mr Diamond's decision to bring new proceedings which repeat issues which had already been raised in the earlier proceedings is also clearly an abuse of process: see Sinclair v British Telecommunications PLC and Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404. 12 Under s 67 of the Civil Procedure Ac 2005, the court has a general power to stay any proceedings. Furthermore, r 13.4 (1)(c) of the Uniform Civil Procedure Rules 2005 expressly enables the court to order that proceedings to be dismissed if those proceedings are an abuse of process of the court. It is also appropriate that these proceedings should be dismissed as an abuse of process. 13 I conclude, therefore, that the present proceedings are a nullity and must, as a consequence, be dismissed. I also conclude that, for the additional reason that the proceedings are an abuse of process of the court, they must be dismissed. An order for security for costs, as sought by the first respondent, becomes unnecessary. 14 Since Mr Diamond's proceedings must be dismissed, it follows that Mr Diamond's notice of motion for an adjournment, an order for mediation and for leave to issue notices to admit facts is also dismissed. 15 The formal orders are: 1. The principal proceeding, being the application filed on 29 July 2008, is dismissed. 2. The applicant's notice of motion, that is Mr Diamond's, notice of motion filed on 15 October 2008, is dismissed. 3. The applicant, that is Mr Diamond, is to pay the respondents' costs of the principle proceeding, being the application filed on 29 July 2008, and including costs of the first respondent's amended notice of motion filed on 21 October 2008 and the applicant's notice of motion filed on 15 October 2008. 4. The exhibit may be returned. WEBSTER: Will your Honour hear me on the question of costs? HIS HONOUR: I've already ordered costs. WEBSTER: Sorry, your Honour, do you want to hear me further in regard to another order that I would ask your Honour to consider. In regard to paragraph 3 of our motion, we sought that the applicant be restrained from commencing or joining the commencement of any proceedings in this court without the leave of the court. HIS HONOUR: What you're seeking is an order in effect that he be declared a vexatious litigant. WEBSTER: No, not to that extent, your Honour. I mean vexatious litigant would cover greater ramifications. What I'm merely seeking to do is to ensure that we're not met with another application like this one, in other words having to seek the leave of this court to be able to start those proceedings. HIS HONOUR: No, I won't do that. Mr Webster, these proceedings could've been nipped in the bud as soon as the application had been filed without the need to file all these affidavits going to the substance of Mr Diamond's claim. WEBSTER: Yes. HIS HONOUR: If Mr Diamond chooses to commence any other proceedings against your client, whilst still a bankrupt and/or whilst the judgment debt against him remains unsatisfied, it's open to you to move immediately, without any further notice, for dismissal. I hereby certify that the preceding 15 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. 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